Customs Taxes The Shipper $500 in Tax on a Lens

[RobertOToole]

Yesterday I get a CC charge from DHL for over $750 for a single shipment, over $500 of that being for the VAT (Consumption tax or value-added tax) that Japanese customs billed for re-importing the Mejiro lens into Japan. which is about a month after I returned the Mejiro FL1030 lens to Tokyo. I opened a dispute over the fee last night but DHL warned me about Japanese customs. Looks like its my fault for not making sure the little tick box marked BILL ALL DUTIES AND TAXES TO THE RECEIVER was left empty. and I have a bad feeling about this, DHL handled all the paperwork, but still it looks like I'm going to lose.

Also I have a feeling that DHL included all the proper details of the transaction but I am about 99.9% sure it was all in english characters.

(the FL1030 test thread: viewtopic.php?f=25&t=44805)

I could just ignore the bill and let them close my account, after all I am not personally liable for the charge since its a corp account, but I do legitimately owe DHL money for the shipping and it would cost me more than $500 to close and re-open a corporation so thats not an option, but I thought about it though (this is why US corporations exist after all, to avoid paying taxes and to protect the owner(s) from liability).

Best,

[jfiresto]

Could you get a exemption/refund under Art. 14, 9-11, 13 and 14, Exemption for re-importation?

See Procedure of Obtaining Refunds/ Drawbacks on Duty Payments with a link to a list (PDF) at the bottom.

[RobertOToole]

Could you get a exemption/refund under Art. 14, 9-11, 13 and 14, Exemption for re-importation?

See Procedure of Obtaining Refunds/ Drawbacks on Duty Payments with a link to a list (PDF) at the bottom.

Excellent link thank you. I spent some time on that site this morning and missed that.
I should wait for DHL first but I will send them a note just to inquire.


Best,

Robert

[jfiresto]

You are welcome and good luck!

[RobertOToole]

You are welcome and good luck!

Thanks for that, I think I will need the luck!

I emailed Tokyo customs and they did emailed me back already so thats a good sign.

Best,

[Lou Jost]

That is indeed a good sign! Surprisingly fast response time.

[RobertOToole]

Interesting development, from Japan Customs in Tokyo via email message from this morning:

Dear Sir,

Thank you for your e-mail again.

Let us explain about general import customs procedures in Japan. When items are imported into Japan, “Customs duty” (Its rate on most machines are 0%) and 10% of “Consumption Tax” (not “VAT; Value Added Tax”) is basically levied even if they are used or re-imported items. Also, the person liable to pay tax is the importer, NOT the exporter. If you sent it by DHL, DHL Japan is supposed to make the import declaration and pay tax to Customs as a Customs broker on behalf of the importer and deliver it to the importer with the bill for the tax. Therefore, in principle, the exporter will not be a tax payer.

Hence, we recommend you to ask DHL on whether the “VAT” in DHL’s bill means “Consumption Tax” in Japan? Or “VAT”?

From DHL invoice:

DHL Express Worldwide DHL - 1646471186X
DUTIES & TAXES PAID FEE $ 17.00
Value Added Tax (VAT) $ 497.47
GST :$ 0.00
Total $ 514.47

This looks like good news but I have a feeling DHL will make more excuses.

[RobertOToole]

Final Update Tuesday May 10th

Good news!

-Forwarded the email message from Tokyo customs to DHL.

-DHL actually replied that the email was correct.

-This led to the next question, if customs is correct and DHL owes me credit what are we disputing?

-DHL did a quick shift and told me there is no dispute, DHL followed my instructions by charging tax and duty to the exporter (that would be my company).

-I asked DHL to please share where and how I instructed them to do that, knowing that DHL prepared all the paperwork for the shipment (I was never involved in preparing any documents as all shipment details were sent by email).

-In 5 minutes, a new world record, DHL admitted it was in fact a DHL error since they prepared all the paperwork and I would get a credit issued for the $514.

-DHL asked me if I could forward a letter to Mejiro asking them to acknowledge the tax and pay the $514 but I declined.

Hopefully if something like this happens to anyone in the future my experience with DHL might help.

Best,

[Scarodactyl]

Glad to hear that! That's pens money right there.

[bobfriedman]

Good news.. and I am glad you shared your experience as an education to everyone doing international shipping.

[rjlittlefield]

I'm almost totally clueless about customs taxes. But I am curious...

Was there some way that the paperwork could have been prepared, that would have avoided customs tax being paid to Japan?

Or is this a case where Japan would have demanded the customs tax in any case, and the only question is who pays it?

--Rik

[RobertOToole]

I'm almost totally clueless about customs taxes. But I am curious...

Was there some way that the paperwork could have been prepared, that would have avoided customs tax being paid to Japan?

Or is this a case where Japan would have demanded the customs tax in any case, and the only question is who pays it?

--Rik

Hi Rik,

From what Japan customs said its the importer that is liable. In my case DHL checked off the duties and tax paid by the sender for some reason.

I've asked the shipping manager at Mejiro Japan if they have to pay tax when re-importing lenses from other countries when they loan to prospective company buyers. I'll update when they respond. I'm curious to know if there is an exemption.

Best,

Robert

[RobertOToole]

I'm almost totally clueless about customs taxes. But I am curious...

Was there some way that the paperwork could have been prepared, that would have avoided customs tax being paid to Japan?

Or is this a case where Japan would have demanded the customs tax in any case, and the only question is who pays it?

--Rik

Rik,

Got a reply from Mejiro in Japan. They tell me that the 10% consumption tax applies to almost all imported goods over 10,000 JPY (about $75 USD). In the case of something re-imported like the lens they loaned me for testing, Mejiro pays no tax or duty on the importation back into Japan. They sometimes use an an export certificate to show the lens is a re-import if there is any problem.

Best,

Robert

[rjlittlefield]

OK, thanks.

So, I think I'm hearing that DHL just messed up and prepared the paperwork incorrectly so as to trigger customs fees that could have been legally avoided.

Do I have that right?

--Rik

[bobfriedman]

DHL may probably just the freight forwarder for a local delivery service in Japan. Either way, my guess is since the box wasn't checked to seek fees from the local originator on the return transfer they took the easy route.